EUR/USD drops further, eyes last week's lows as the USD strengthens
- US dollar gains momentum versus G10 currencies.
- DXY up for the second day in a row.
- EUR/USD with bearish bias after being rejected from near 1.0300.
The EUR/USD is falling for the second day in a row, and recently printed a fresh six-day low at 1.0121. From Tuesday’s high it has fallen almost 175 pips amid a recovery of the US dollar.
The greenback is rising again on Wednesday, particularly versus G10 currencies as US yields climb further. The 10-year Treasury yield hit 2.85%, the highest level since July 22, before pulling back to 2.79%.
Economic data from the US contribute to the move higher of the USD. The ISM Service PMI rose unexpectedly in July to 56.7 from 55.3, against the market consensus of 53.5. The key report will be on Friday with the non-farm payrolls.
An improvement in risk sentiment limits the upside of the dollar. In Wall Street, the Dow Jones is up by 0.92% and the Nasdaq soars 1.82%. Stocks are breaking a two-day negative streak.
Looking at crucial support
The slide in EUR/USD pushed the price under the 20-day Simple Moving Average (1.0155). Now it is moving closer to the critical short-term support area around 1.0100, a consolidation below should open the doors to more losses.
On the upside, now 1.0150 is the immediate resistance followed by 1.0210 (20-SMA in four hours). As long as below 1.0300, gains seem limited for the pair.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
